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Software arm sale brings in GBP 135m for Psion

Posted on: Tuesday, 10 February 2004, 06:00 CST

ELECTRONICS group Psion has raised GBP 135.7 million after selling its stake in the mobile phone software business it co- founded more than five years ago.

Psion said it had disposed of its 31.1 per cent holding in Symbian to Finnish mobile phone maker Nokia, already Symbian's largest shareholder.

London-based Psion, which made its name in handheld personal organisers, said the sale would allow it to focus on developing its core hand-held computer business, Psion Teklogix.

It said the deal would realise the "significant value" Symbian created for shareholders since Psion formed the business in 1998.

The deal gives Nokia a share of just over 63 per cent in Symbian, whose other shareholders include Sony Ericsson, Samsung, Siemens and Matsushita, which owns Panasonic. Symbian employs about 200 people in the UK.

The value of the agreement, which is still subject to shareholder approval, could increase if Symbian is floated before the end of 2005 and the price exceeds the value of Nokia's offer.

Psion chairman David Potter said a flotation had always been seen as a "desirable objective" for Symbian, but added: "Changes in the wireless industry mean the practicality and timing of the initial public offer is subject to uncertainty."

Psion set up Symbian to create a world standard operating system enabling mobiles to offer data as well as voice communications.

Customers using mobile phones equipped with Symbian software can use third-generation network services such as video clips or billing information.

Nokia, Motorola and Ericsson all held shares in Symbian when it was created, but Nokia has since become its single biggest customer.

Last year, United States mobile phone maker Motorola sold its stake in Symbian to Nokia and Psion.

Mobile phone handset makers expect to sell more than 550 million units this year, and the Psion deal narrows their choice of suppliers for new software to two major players - Nokia and Microsoft.

John Strand, a mobile telecoms consultant, said: "The other investors in Symbian will now have to decide if they want to be part of Nokia or Microsoft. They're caught between a rock and a hard place."

But a spokesman for Samsung said: "Nothing changes for us as a result of Nokia taking a bigger stake in Symbian. Symbian software will remain an important tool for us."

A Siemens spokesman added: "It makes sense for any operating system to be available to as many operators as possible. I don't believe they would have any interest in making it a Nokia standard."

In a trading update in December, Psion said

Symbian's results for the year to the end of December would meet expectations, with 2003 revenues from Psion Teklogix set to exceed those in the previous year.

However, it added second-half profits would reflect the cost of launching new Teklogix products, including the Netbook Pro and the 7535 handheld terminal.

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